Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Technical Analysis

FTSE China A50 Index / Technical Analysis

There has been a tendency to over-exaggerate bad news from China. This has been going on for a long time (years). Over the past three months there has been plenty of concerning news from crackdowns on Tech companies to changes in the education sector and developments in real estate.Despite all this bad news, the FTSE A50 Index has not moved lower since the end of July. Instead, the A50 Index is now beginning to bounce back, taking out decent levels and posting an important weekly close on Friday. Even the more troubled Hang Seng posted a bullish reversal week. If anything, this price action is more impressive in the face of a generally strong Renminbi.Once again it looks as though sentiment has been too stretched in China. Is the bad news already in the price? These charts suggest the answer to that, at least in the near term, is yes.

There has been a tendency to over-exaggerate bad news from China. This has been going on for a long time (years). Over the past three months there has been plenty of concerning news from crackdowns on Tech companies to changes in the education sector and developments in real estate.Despite all this bad news, the FTSE A50 Index has not moved lower since the end of July. Instead, the A50 Index is now beginning to bounce back, taking out decent levels and posting an important weekly close on Friday. Even the more troubled Hang Seng posted a bullish reversal week. If anything, this price action is more impressive in the face of a generally strong Renminbi.Once again it looks as though sentiment has been too stretched in China. Is the bad news already in the price? These charts suggest the answer to that, at least in the near term, is yes.

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Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

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A50 breakout thrust is a key bull trigger after forming a triple low. 15,500 was the barrier to clear representing a breakout from the triangle range.Shanghai composite does not mirror this breakout as of yet.RSI is pushing above trend resistance and a level that needs to stick.MACD need to clear trendline resistance to induce a more constructive macro backdrop.There are slow down and liquidity risk headwinds and may make the 16,500 level a fresh short zone after a quick bull push into November.

A50 breakout thrust is a key bull trigger after forming a triple low. 15,500 was the barrier to clear representing a breakout from the triangle range.Shanghai composite does not mirror this breakout as of yet.RSI is pushing above trend resistance and a level that needs to stick.MACD need to clear trendline resistance to induce a more constructive macro backdrop.There are slow down and liquidity risk headwinds and may make the 16,500 level a fresh short zone after a quick bull push into November.

Korea Stock Exchange KOSPI 200 / Technical Analysis

Monday's turn call to sell down longs and put on additional shorts panned out. Now we are positioning for a mild bounce into the month/quarter end to lean on shorts. October still expected to see another leg down. Bigger cycle date comes in near October 7-8th.Top shorts in Asia are Korea (due to undershoot on the back of SEC) and HSI (nearing a low) and Taiwan as the recent addition to our short conviction group.A50 flirting with big breakout resistance at 15,500 and will drive H share direction. A shares show potential to buck the region negative trend if the A50 clears 15,500 pivot.

Monday's turn call to sell down longs and put on additional shorts panned out. Now we are positioning for a mild bounce into the month/quarter end to lean on shorts. October still expected to see another leg down. Bigger cycle date comes in near October 7-8th.Top shorts in Asia are Korea (due to undershoot on the back of SEC) and HSI (nearing a low) and Taiwan as the recent addition to our short conviction group.A50 flirting with big breakout resistance at 15,500 and will drive H share direction. A shares show potential to buck the region negative trend if the A50 clears 15,500 pivot.

SPX Trendline Rejection/Asia Short Targets

The <a href="https://www.smartkarma.com/entities/ftse-china-a50-index" target="_blank" data-smartkarma-citation="entities:22905:1" rel="noopener">FTSE China A50 Index (XIN9I INDEX)</a>(Future) is bouncing back sharply at the start of this week.The price action &amp; setup looks very similar to that seen in May when the pop saw a 6% rally from the breakout level. Something similar again this time?

The FTSE China A50 Index (XIN9I INDEX)(Future) is bouncing back sharply at the start of this week.The price action &amp; setup looks very similar to that seen in May when the pop saw a 6% rally from the breakout level. Something similar again this time?

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

*Gaming Caught In The Crosshairs: Mainland China indicated that changes are afoot to gaming regulations, including the appointment of government officials to supervise the companies - just as Macau's lucrative gaming licenses come up for re-bidding in 2022; and*Financials Likely Next: There appears to be a genuine timeline for each sector in mainland China to be taken out to the woodshed. Now that the gaming industry is now being placed under firm control, it would appear to only be a matter of time when the financial sector will be re-configured to suit mainland China’s vision – likely ahead of the national elections in 2022.

*Gaming Caught In The Crosshairs: Mainland China indicated that changes are afoot to gaming regulations, including the appointment of government officials to supervise the companies - just as Macau's lucrative gaming licenses come up for re-bidding in 2022; and*Financials Likely Next: There appears to be a genuine timeline for each sector in mainland China to be taken out to the woodshed. Now that the gaming industry is now being placed under firm control, it would appear to only be a matter of time when the financial sector will be re-configured to suit mainland China’s vision – likely ahead of the national elections in 2022.

Mainland China – Here Comes The Rein Again

China

The FTSE China A50 Index includes the largest 50 A Share Chinese companies by total market cap. 

FTSE China A50 Index (XIN9I INDEX)

China’s Rebound

China's indices from, the FSTE China A50 to the Hang Seng and Shanghai Composite, are all beginning to show signs of strength again

Shyam Devani

A50 Breakout

A50 breakout thrust is a key bull trigger after forming a triple low. 15,500 was the barrier to clear representing a breakout from the triangle range.

Thomas Schroeder

SPX Trendline Rejection/Asia Short Targets

Monday's turn call to sell down longs and put on additional shorts panned out. Use a month/quarter end bounce to lean on shorts. October to see...

Thomas Schroeder

Ready for the China Pop?

The price action & setup on the FTSE China A50 Index is very similar to that seen in May suggesting a decent short term bounce over the coming days

Shyam Devani

Mainland China – Here Comes The Rein Again

FINANCIALS IN CROSSHAIRS: Mainland China is appointing government officials to supervise the gaming companies. There appears to be a genuine...

Thomas J. Monaco